VTB not worried over Mozambique, despite tardy payment

Russia’s VTB bank did not expect any significant losses from its operations in Mozambique, despite experiencing problems with a major loan, VTB CEO Andrey Kostin said.

Mozambique Asset Management (MAM) borrowed $535m from VTB to build shipyards in Maputo and Pemba in expectation of a rapid takeoff in the offshore gas sector.

But MAM missed a May 23 deadline for its first loan repayment of $178m.

VTB said in June it had shared the bulk of its $535m loan to MAM, a state firm, with investors active in that region. It did not disclose which investors.

VTB, together with Credit Suisse, also helped to arrange a $622m loan for maritime security projects for Proindicus, which is owned by the defence and interior ministries and state security service. “Mozambique was not a bad deal, and given even the current situation, possible losses are in line with expected profit.

VTB CEO Andrey Kostin

“We have a portfolio sold out on the market, so any significant losses for the bank should not be expected,” said Kostin.

“We are in talks with Mozambique. Our position is that the country should serve, pay off, honour its obligations.”

Kostin said he saw the African continent in general as a “high-risk zone”, but one in which operations should continue. “Investors invested in Greece and look how they got burned — but Mozambique is way better than Greece,” he said.